2 min read
How a cross-guarantee works
In a group with a parent and subsidiaries, a lender may ask each company to guarantee the others’ facilities. If one subsidiary defaults, the lender can enforce against a healthy sibling. It is a company-to-company obligation, distinct from a director’s personal guarantee.
Why it matters
Cross-guarantees can undo the ring-fencing you set up by using separate companies. A single failure spreads to the group. Standalone, unsecured company borrowing keeps each entity’s risk contained.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. Credicorp lends to a single company on its own merits, without group cross-guarantees or a personal guarantee. See business loans or apply online.
Frequently asked questions
Does a cross-guarantee affect me personally?
No — it is between companies. Your personal assets are only reached by a director’s personal guarantee, which is a separate document.
Should I agree to a cross-guarantee?
It links your companies’ fortunes together, so one failure can pull in another. Standalone company borrowing keeps each entity ring-fenced.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.